Sunday, January 25, 2015

In the immortal words of Veruca Salt from Willy Wonka & the Chocolate Factory, “Don’t care how. I want it now!”

That pretty much sums up our attitude in today’s just-in-time world. We rely heavily on technology and the ability to access just about anything and everything with the push of a button via an Internet browser or mobile app. We demand that our social media sites and entertainment sources like Pandora and Twitter all work just by launching an application on our phone. We require the ability to leave our desk behind and still access our email, Salesforce tools, or critical documents from our tablet.

The desire for “on-demand everything” is fundamentally evolving the way companies use and invest in data centers, effectively borrowing a concept from the 1950s: the “just-in-time” data center. It’s based on a leasing model derived from organizations’ needs to maintain a competitive edge and react quickly to market demands, while cost-effectively investing in facilities that require less financial and maintenance commitments.

Organizations of all types and sizes are driving this trend for different reasons. Many startups used to depending on cloud service providers are outgrowing those services but are not yet ready for the financial and operational commitment that owning and operating a data center requires. Many such cloud service providers themselves are turning to data center wholesalers to meet increased scalability demands. And many enterprises, even those that do own their own centers, are turning towards leasing (or a combination of owning and leasing) to more effectively address business-critical needs that are time-sensitive or ones that require data center services for a limited time, such as developing and testing applications in a sandbox prior to production roll-out.

It’s not surprising, considering the infrastructure benefits that leasing offers. Companies that lease data centers don’t need to worry about the centers not being able to scale with their needs; they simply can lease additional space as necessary. Leased data centers also provide a measure of control, flexibility and autonomy.

In addition, leasing space on-demand provides other benefits that go beyond the infrastructure. For example, companies do not have to worry about staffing or capital investments. They can also lease space with immediate access to Tier 1 carriers, subject matter experts and the latest in technology – allowing businesses to focus on their core competencies while leaving the data center infrastructure solution to the experts. This type of agility enables companies to invest in what they need today and scale as their businesses grow tomorrow.

All of these factors will drive demand for just-in-time data centers in 2015, but there are others. The product development lifecycle is shortening, and the timeline from when an organization conceives a new app to product launch continues to get shorter and shorter. Whether the organization chooses to utilize a cloud service provider to bring the app to market, or stand up their own servers, those servers need to live somewhere. As such, data center operators need to ensure they have a reasonable amount of inventory available to handle the increasing number of quick asks they are receiving for space.

Increased data usage and data retention will also accelerate the need for cloud services and scalable data centers. The growing popularity of wearable and connected devices, GPS, and apps that use real-time geotargeting will increase the need for hosted cloud services – and easily scalable, just-in-time data centers. All of that data will need to be stored somewhere, and wholesale data centers will be attractive options for many companies.

The need for added computing power in advance of large-scale worldwide events will also feed the need for just-in-time data centers, a trend that has already begun to take shape. During the 2014 World Cup many social networks added computing power in advance of the event due to the sheer volume of people using their service. However, because the increase in volume was temporary, it made more financial sense for these organizations to work with a data center wholesaler to acquire the computing power needed for the select time period. While 2015 may be relatively quiet on the large event front, we’ll see enterprises begin planning for the increase in traffic and computing power needed for the 2016 Olympics and U.S. presidential election.

Finally, we’ll see more healthcare organizations becoming data center customers. This will be driven by the rise of electronic medial records and the need to deliver information to consumers via websites, apps and more. Organizations will seek to leverage the benefits of data center leasing in order to house the enormous amounts of data these applications require, and ensure that the data is kept secure and within compliance standards.

The consumer’s need for increasing use of computing technology is growing faster than the ability for anyone to build a data center. Before technology can improve fast enough, the consumer will have to slow down their ferocious appetite for doing things in an instant electronically – and that’s not going to happen.

Today, companies need enormous flexibility to address these voracious demands – and leasing provides them with that option. It allows organizations to bring products to market faster, manage massive amounts of data, and handle the on-demand needs of today’s society. That’s why leased data centers may be the golden ticket for companies in 2015.

About the Author

Lee Kestler is a senior executive with DuPont Fabros Technology (DFT) and has been leading the DFT sales and marketing effort since the company’s IPO in October 2007. An industry veteran, Kestler’s depth of experience includes all aspects of the data center business, from wholesale data centers to public and enterprise IT services for global companies. He is a member of the advisory board for SafeLogic, a Silicon Valley-based security company specializing in encryption technology. A lifelong resident of the Washington D.C. area, Kestler has witnessed the explosive development of the data center industry within the Mid-Atlantic since 1999.

DuPont Fabros Technology

DuPont Fabros Technology Inc. (NYSE: DFT) is a leading owner, developer, operator and manager of enterprise-class, carrier-neutral, large multi-tenanted wholesale data centers. The Company's facilities are designed to offer highly specialized, efficient and safe computing environments in a low-cost operating model. The Company's customers outsource their mission-critical applications and include national and international enterprises across numerous industries, such as technology, Internet content providers, media, communications, cloud-based, healthcare and financial services. The Company's 11 data centers are located in four major U.S. markets, which total 2.75 million gross square feet and 240 megawatts of available critical load to power the servers and computing equipment of its customers. DuPont Fabros Technology is a real estate investment trust (REIT) headquartered in Washington, DC. For more information, please visit www.dft.com

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AT&T commemorated the 100th anniversary of the first transcontinental telephone call, which took place on January 25, 1915 and led up to the official opening of the original Panama Pacific International Exposition (PPIE) and World’s Fair in San Francisco.

The historic call was initiated by Alexander Graham Bell (in New York) and included Theodore Vail, the president of the American Telephone and Telegraph Company (now AT&T) in Jekyll Island, Georgia, United States President Woodrow Wilson in the White House and Bell’s assistant Thomas Watson in San Francisco.

"America's latest innovations were on full display at the World's Fair in 1915, and the first transcontinental phone call was one of the most significant technologies shown," said Dr. Anthea Hartig, Executive Director of the California Historical Society. "These exhibitions will celebrate PPIE, giving residents and visitors the opportunity to see these original phones and other artifacts from the World's Fair that highlight the great innovation milestones and discover how our spirit of innovation has shaped the city's past, present and future."